Freeport-McMoRan to induce conversion of $268 million 5.5% convertible preferreds

By Angela McDaniels

Tacoma, Wash., Dec. 18 - Freeport-McMoRan Copper & Gold Inc. said it agreed in privately negotiated transactions to induce conversion of $268 million of its 5.5% convertible perpetual preferred stock into about 5.8 million shares of common stock.

To induce the conversion of these preferreds, Freeport-McMoRan will issue an additional 1 million shares of common stock valued at $22 million to the preferred holders at the time of the conversions, according to an 8-K filing with the Securities and Exchange Commission.

The company will record a $22 million charge to preferred dividends in the fourth quarter in connection with these transactions and estimates its annual dividends savings will be about $15 million.

Following the conversions, the amount of preferreds outstanding will be about $832 million.

Freeport-McMoRan is a mining company based in Phoenix.

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